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RM 32: Application of sections RM 13 to RM 17 to qualifying companies
or “Rules for tax refunds and overpayments for qualifying companies”
You could also call this:

“Limits on refunds when unit trusts and investment funds close or change”

This section talks about refunds for public unit trusts and group investment funds. You need to know about this if you’re dealing with these kinds of investments.

If a public unit trust or group investment fund is allowed to get a refund under certain rules, and it decides to close down or become a portfolio investment entity, there are some things to consider. At the time this happens, if it has money in its available subscribed capital (ASC) account but nothing in its imputation credit account, there’s a limit on how much refund it can get.

The refund can’t be more than what you get when you multiply the money in the ASC account by something called the maximum imputation ratio. This ratio is worked out using special rules, but instead of looking at when a dividend is paid, we look at when the trust or fund is closing down or changing to a portfolio investment entity.

This helps make sure that the refund is fair and follows the rules about how much money can be given back in these situations.

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Part R General collection rules
Refunds: Certain unit trusts and group investment funds

RM 33Limits on refunds for certain unit trusts and group investment funds

  1. This section applies when a public unit trust or group investment fund—

  2. is entitled to a refund under section RM 2, RM 4, or RM 5; and
    1. goes into liquidation or chooses to become a portfolio investment entity; and
      1. at the time of the liquidation or election, has—
        1. a credit balance in its available subscribed capital (ASC) account on liquidation; and
          1. a zero balance in its imputation credit account.

          2. The refund must be no more than an amount calculated using the formula—

            ASC credit balance × maximum imputation ratio.

            Where:

            • In the formula,—

            • ASC credit balance is the credit balance in the ASC account of the public unit trust or group investment fund, as applicable:
              1. maximum imputation ratio is the maximum permitted ratio calculated under section OA 18(2) (Calculation of maximum permitted ratios), read as if the words in which the dividend or distribution is paid in subsection (3) were in which the liquidation occurs or the election is made.

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                Notes
                • Section RM 33(1)(a): amended (with effect on 1 April 2013), on , by section 97 of the Taxation (Livestock Valuation, Assets Expenditure, and Remedial Matters) Act 2013 (2013 No 52).